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Armor All/STP Products Co. v. TSI Products, Inc.

United States District Court, D. Connecticut

August 30, 2018

ARMOR ALL/STP PRODUCTS COMPANY, Plaintiff,
v.
TSI PRODUCTS, INC., MICHAEL QUEST, and WILLIAM QUEST, Defendants.

          RULING ON MOTION TO COMPEL ARBITRATION

          Michael P. Shea, U.S.D.J.

         Plaintiff, Armor All/STP Products Company (“Plaintiff”), brings this action against Defendants TSI Products, Inc., Michael Quest, and William Quest (collectively, “Defendants”) for allegedly deliberately copying Plaintiff's trademarks, trade dress, and creative works in order to compete with Plaintiff in the market for “do-it-yourself” refrigerant kits for vehicle air conditioners. Plaintiff brings claims for trademark infringement, trademark counterfeiting, unfair competition, trade dress infringement, and false advertising under the Lanham Act, 15 U.S.C. § 1051 et seq., and copyright infringement under the Copyright Act, 17 U.S.C. § 501 et seq. Plaintiff also brings claims for trademark infringement, unfair competition, and unjust enrichment under Connecticut common law, and for unfair competition under the Connecticut Unfair Trade Practices Act (“CUTPA”), Conn. Gen. Stat. §§ 42-110a, et seq. Finally, Plaintiff brings a claim for false patent marking under 35 U.S.C. § 292. (See Amended Complaint, ECF No. 9.) Defendants move to dismiss the complaint for lack of subject matter jurisdiction and to compel arbitration under the Federal Arbitration Act and a provision of a consulting agreement they argue governs this dispute. (ECF No. 22.)[1] For the reasons set forth below, the motion is DENIED.

         I. Factual Allegations

         The following facts are taken from the amended complaint (ECF No. 9) and the exhibits attached to the parties' briefs.

         A. Plaintiff's Brand and Products

         Plaintiff is “the recognized leader” in the industry of “do-it-yourself” kits for replenishing lost chemical refrigerant in vehicle air conditioners, a process called “recharging.” (ECF No. 9 ¶ 12.) Plaintiff's products allow consumers to add refrigerant to their own vehicles, avoiding the need to take the car to be serviced by a professional mechanic. (Id.) Plaintiff sells its products at major hardware and automotive supply retail stores throughout the United States. (Id. ¶ 15.) Plaintiff also maintains three websites that provide consumers with instructions for using its kits and other information about its products. (Id. ¶ 17.)

         Plaintiff's brands of do-it-yourself refrigerant kits and refill products are sold under several trademarks, including “HIGH MILEAGE, ” “A/C PRO, ” “ARCTIC FREEZE, ” “SUB-ZERO, ” “EZ CHILL, ” and “BIG CHILL.” (Id. ¶ 14.) The United States Patent and Trademark Office (“PTO”) has issued Plaintiff two federal trademark registrations for the “HIGH MILEAGE” mark, one for the word mark HIGH MILEAGE for use in connection with “refrigerant chemical preparations for use in connection with automobile air conditioners, ” and one for a stylized mark displaying the word HIGH in diagonal, upward sloping letters above the word MILEAGE, which is also displayed in diagonal, upward sloping letters in “an odometer style format.” (Id. ¶ 18.) The HIGH MILEAGE marks were registered in 2011 and 2012, respectively, but Plaintiff and its predecessor IDQ have sold refrigerant products under the marks since at least as early as 2004, using online, print, and in-store advertising. (Id. ¶ 20.) The HIGH MILEAGE marks were originally registered to IDQ but were acquired by Plaintiff during its merger with IDQ in 2015. (Id. ¶ 23.)

         Plaintiff also uses certain trade dress on its “A/C PRO” and “HIGH MILEAGE” families of products. (Id. ¶ 24.) Plaintiff's A/C PRO trade dress includes a black canister with a large black and white A/C PRO logo along the top of the front face of the canister with a black and white image of a man positioned behind the logo, a blue banner along the middle of the canister, and a set of icons and short phrases along the bottom of the canister summarizing the benefits of the product. (Id. ¶ 25.) Certain versions of Plaintiff's A/C PRO products also include a banner with an image of a clock across the top of the canister. (Id. ¶ 26.) Others display the HIGH MILEAGE word mark across the front face of the canister. (Id.) Plaintiff also uses a HIGH MILEAGE trade dress for certain products, which prominently displays the stylized HIGH MILEAGE mark in red and white on the front face of the canister. (Id. ¶ 27.)

         Plaintiff has sold do-it-yourself refrigerant products featuring its BIG CHILL and ARCTIC FREEZE marks since 2005. (Id. ¶ 28.) Plaintiff's BIG CHILL product line features a “prominent mountain design mark and trade dress, ” displaying a snow-covered mountain behind the BIG CHILL logo on the face of the product. (Id.) Plaintiff's ARCTIC FREEZE products have featured a blue trade dress since 2005. (Id. ¶ 29.) In 2014, Plaintiff commissioned the design of new ARCTIC FREEZE product labels and advertising materials featuring images of snow-covered mountains. (Id. ¶ 30.) Plaintiff began distributing ARCTIC FREEZE products with the redesigned label featuring the snow-covered mountain design mark in 2016. (Id. ¶ 32.)

         In 2017, Plaintiff filed applications with the U.S. Copyright Office to register as creative works the labels featured on its A/C PRO and HIGH MILEAGE-branded products. (Id. ¶ 35.)

         B. The Parties' Relationship and the Consulting Agreement

         In 2007, refrigerant product supplier E.F. Products, L.P. (“EF”), merged with Interdynamics, Inc. (“Interdynamics”) to form IDQ, Plaintiff's corporate predecessor. (Id. ¶ 38.) At that time, Defendant William Quest was employed as President of EF and Defendant Michael Quest served as Vice President, Secretary, and Treasurer of EF. (Id. ¶ 40.) EF used the HIGH MILEAGE marks before it merged with Interdynamics. (Id. ¶ 39.) After the merger, the marks were transferred to IDQ, and then to Plaintiff after Plaintiff's merger with IDQ. (Id.) Following the merger, Michael Quest remained employed by IDQ as Executive Vice President from 2007 to 2009, and then provided IDQ with consulting services in connection with the sales of refrigerant products from 2009 to 2011. (Id. ¶ 42.)

         Paragraph 42 of the amended complaint alleges that Michael Quest's work as a consultant for IDQ was governed by a consulting agreement (“the Consulting Agreement”) executed on July 28, 2009. The Consulting Agreement provided that Michael Quest would not compete with IDQ until January 1, 2014. (Id. ¶ 42.) It also contained confidentiality provisions requiring him to keep confidential certain information learned during his employment with IDQ. (Id.) The confidentiality provision was to remain in effect indefinitely after the termination of the Consulting Agreement. (Id.)

         The complaint does not attach or, except in paragraph 42, refer to the Consulting Agreement, but Defendants have attached a copy to their motion to dismiss and compel arbitration.

         Article VII, Section 7.1 of the Consulting Agreement provides:

Section 7.1 Remedy. Should Consultant engage in or perform, either directly or indirectly, any of the acts prohibited by Article IV or, in any other way, violate such Article, it is agreed that the Company shall be entitled to full injunctive relief, to be issued by any competent court of equity, enjoining and restraining Consultant and each and every other person, firm, organization, association, or corporation concerned therein, from the continuance of such violative acts. The foregoing remedy shall not be deemed to limit or prevent the exercise by the Company of any or all further rights and remedies which may be available to the Company hereunder or at law or in equity.

Article IV of the Consulting Agreement sets forth the non-compete and confidentiality obligations referred to in paragraph 42 of the complaint, as well as other obligations. Article VII, Section 7.2 of the Agreement sets forth the arbitration clause on which Defendants' motion relies:

Section 7.2 Arbitration. Subject to Section 7.1 of this Agreement, the only mechanism to settle any dispute, controversy or claim arising out of or relating to this Agreement shall be settled [sic] by binding arbitration in Garland, Texas, before a single arbitrator in accordance with the Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator may be entered in the federal courts located in Texas.

(ECF No. 23-2 at 7.) Article VII, Section 7.11 provides that it “is binding on [Michael Quest] and [IDQ] and their successors and assigns.” (Id. at 9.)

         C. Defendants' Brand and Products

         In 2014, William and Michael Quest allegedly co-founded the “Avalanche” division of Defendant TSI Products, Inc., which also produces automotive refrigerant products. (ECF No. 9 ¶ 38.) Plaintiff alleges that in January 2015, TSI launched the family of “Avalanche” refrigerant products featuring a blue and white trade dress with a label design and snow-covered mountain design mark similar to those used by Plaintiff. (Id. ¶ 43.) Plaintiff alleges that TSI employed former employees of Plaintiff who “may . . . have had access to information and designs related to Plaintiff's 2014 ARCTIC FREEZE redesign project during their employment by Plaintiff.” (Id. ¶ 44.) Since 2015, Avalanche products have competed directly with Plaintiff's BIG CHILL and ARCTIC FREEZE products. (Id. ¶ 43.)

         Defendants launched a new line of premium refrigerant products, the Avalanche Black Diamond products, in April 2016. These products allegedly compete directly with Plaintiff's A/C PRO line of premium products. (Id. ¶ 47.) Plaintiff alleges that one of these products uses a “counterfeit imitation of Plaintiff's HIGH MILEAGE Marks, ” and replaced the blue and white color scheme used on Defendant's mid-tier refrigerant products with a dark grey or black label resembling Plaintiff's A/C Pro and High Mileage trade dress. (Id. ¶¶ 47-48.) Plaintiff alleges that these products feature a stylized snow-covered mountain logo resembling Plaintiff's ARCTIC FREEZE mountain mark and compete directly with Plaintiff's ARCTIC FREEZE products. (Id. ¶ 48.) The products also feature the words “HIGH MILEAGE” in upward-sloping diagonal lettering and the word “MILEAGE” in an “odometer format.” (Id. ¶ 50.) Plaintiff alleges that TSI copied its trade dress and trademarks and used them on Avalanche products with the intent to trade on Plaintiff's recognition in the market and goodwill. (Id. ¶ 45.)

         II. ...


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